Correlation Between Design Therapeutics and Gracell Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Design Therapeutics and Gracell Biotechnologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Design Therapeutics and Gracell Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Design Therapeutics and Gracell Biotechnologies, you can compare the effects of market volatilities on Design Therapeutics and Gracell Biotechnologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Design Therapeutics with a short position of Gracell Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Design Therapeutics and Gracell Biotechnologies.
Diversification Opportunities for Design Therapeutics and Gracell Biotechnologies
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Design and Gracell is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Design Therapeutics and Gracell Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gracell Biotechnologies and Design Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Design Therapeutics are associated (or correlated) with Gracell Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gracell Biotechnologies has no effect on the direction of Design Therapeutics i.e., Design Therapeutics and Gracell Biotechnologies go up and down completely randomly.
Pair Corralation between Design Therapeutics and Gracell Biotechnologies
If you would invest 232.00 in Design Therapeutics on November 5, 2024 and sell it today you would earn a total of 240.00 from holding Design Therapeutics or generate 103.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.41% |
| Values | Daily Returns |
Design Therapeutics vs. Gracell Biotechnologies
Performance |
| Timeline |
| Design Therapeutics |
| Gracell Biotechnologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Design Therapeutics and Gracell Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Design Therapeutics and Gracell Biotechnologies
The main advantage of trading using opposite Design Therapeutics and Gracell Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Design Therapeutics position performs unexpectedly, Gracell Biotechnologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gracell Biotechnologies will offset losses from the drop in Gracell Biotechnologies' long position.| Design Therapeutics vs. Monte Rosa Therapeutics | Design Therapeutics vs. Werewolf Therapeutics | Design Therapeutics vs. Ikena Oncology | Design Therapeutics vs. Stoke Therapeutics |
| Gracell Biotechnologies vs. Monte Rosa Therapeutics | Gracell Biotechnologies vs. Design Therapeutics | Gracell Biotechnologies vs. Erasca Inc | Gracell Biotechnologies vs. NextCure |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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